Citigroup (NYSE: C ) today announced $4.2 billion in adjusted net income in the first quarter of 2014, an increase of 4% over the $4.0 billion posted in the first quarter of 2013. In total its net income stood flat at $1.23 per share, surpassing analyst expectations of $1.14.
Citigroup saw its adjusted revenues -- which factor out valuation and other adjustments -- drop slightly, from $20.6 billion to $20.1 billion. Its adjusted expenses fell by 1% year over year to $12.2 billion. The biggest benefit Citi recognized was a substantial decline in its net credit losses, which resulted in its cost of credit dropping from $2.5 billion to $2.0 billion, a decrease of 20%.
Even with its lower revenues, as a result of the declining expenses and dramatically reduced cost of credit in total its income from continuing operations before taxes rose 9%, from $5.5 billion to $6.0 billion.
"Despite a quarter that was difficult for our company, we delivered strong results," noted the CEO of Citi, Michael Corbat, in the press release announcing the earnings. "Both our consumer and institutional businesses performed well and we grew both loans and deposits while holding the line on our expenses."
Citigroup has had a difficult start to 2014. It first announced it would have to reduce its 2013 income by $360 million as a result of fraud from its unit in Mexico. Later it was announced Citigroup did not meet the Federal Reserve's expectations in the CCAR process, denying it permission to raise its dividend and share buyback program as a result of qualitative questions.
"Very cognizant of our shareholders' desire to see a sustainable return of capital, we are engaged with the Fed to better understand their expectations regarding the CCAR process," Corbat continued in his statement. "We are committed to bringing our capital planning process to the highest possible standards, befitting an institution of our global reach. I will dedicate whatever resources and make whatever changes necessary to achieve this critical goal."